GOP Governors surrendering to Obamacare – against common sense and the will of the people

Feb 6, 2013

Last month, Tea Party Patriots reported on how the Oklahoma Medicaid system is using funding from Obamacare to pay for infrastructure upgrades and electronic medical records. We asked readers what you thought of the state’s decision:

What do you think, Patriots? Should Oklahoma and its fellow opponents of the implementation of Obamacare use federal funds to upgrade their health care infrastructures? We know the history of such funding tends to give the federal government more hooks into state control of its citizens. On the other hand, such infrastructure updates are expensive, and since the federal government is requiring it, why not use federal funds for the upgrades?

Now reports are coming out that two other states that have opposed the implementation of Obamacare – Ohio and Arizona – are cowering to federal control. First, from Politico, comes news that Ohio governor John Kasich is using federal funds to expand his state’s Medicaid coverage:

John Kasich, the fiercely conservative governor of Ohio, announced Monday that he’s going to expand Medicaid dramatically using federal money — a 180-degree turn from what conservative groups swore their allies in governors’ mansions would do when the Supreme Court gave them an out last year.

Governor Kasich apparently believes this move will save his state money:

Kasich says the decision will free up money to spend on mental health and other services — since the feds will pay for most of the expansion costs — and will keep everyone else’s health insurance premiums down because there won’t be so many uninsured people going to emergency rooms for their medical care.

He’ll get a ton of money to do it — the federal government will pick up all of the costs of the newly eligible people for the first three years, and then slowly scale that back to 90 percent of the costs.

Kasich also said he had gotten assurances from White House senior adviser Valerie Jarrett that the Obama administration might be willing to give Ohio some special flexibility for doing the Medicaid expansion, like letting the newly insured people get their coverage through the law’s health insurance exchange rather than through Medicaid.

And local health care and business leaders have been pushing Kasich to do it. They say Ohio will save money in the long run and that it makes business sense to do it so community hospitals aren’t forced to close.

Kasich seemed to buy that argument, saying rural hospitals could have faced “financial chaos” if he had refused to expand Medicaid because they no longer would get enough funds to cover the cost of treating uninsured patients.

Lobbying appears to have been a major factor here, as well as a study showing the state would save money over the medium-term:

But hospital officials and leaders of the Cleveland Clinic have been telling Kasich it’s smarter economics to take the feds’ Medicaid money than to pass it up. They point to a study, released last month by the Health Policy Institute of Ohio and three other groups, that concluded the state would actually save $1.4 billion from 2014 to 2022 if it expanded Medicaid.

Yes, the state would have higher costs when more people sign up, the study said — $2.5 billion in extra spending over that time. But those costs would be easily outweighed by about $1 billion in savings — as the federal government kicks in a greater share of the payments for newly eligible people — and from nearly $2.9 billion in new revenues, like the taxes that the state collects on managed care premiums.

Unfortunately, Governor Kasich is not alone in kowtowing to the federal government. Arizona governor Jane Brewer is facing criticism for her own use of federal funding for Medicaid expansion:

As D-Day looms for ObamaCare, one big question is how many states will sign up for its Medicaid expansion. The recent and spectacular flip-flop of Arizona Governor Jan Brewer is a case study in the political pressure and fiscal gimmicks designed to get states to succumb. It’s also a study in the arcane and perverse ObamaCare incentives that are intended to gather ever more health-care spending under federal control.

Brewer’s decision appears to have been impacted by lobbyists at the state level, as well as the logic that “everyone else is doing it” – despite the simple fact her state will lose financial independence from the federal government:

This subsidy honeypot can’t last forever, which is why other Governors are more skeptical about this Obama Medicaid windfall. When the money inevitably runs out, states will retain permanently larger obligations and lose budget autonomy for a generation or two as health care crowds out other priorities like education and roads.

Ms. Brewer was nonetheless besieged by health-industry lobbying, especially from hospitals that want more government money and the insurers that administer Medicaid. The campaign is orchestrated by Chuck Coughlin, Ms. Brewer’s former political strategist, and Peter Burns, a former Brewer budget consultant.

Providers are especially powerful at the state and local level, and the goal now is to rush the Brewer-Obama condominium through the Phoenix legislature with little debate. A particular offender is the Arizona Hospital and Healthcare Association, a trade group whose 2012 agenda includes “Oppose Taxpayer Bill of Rights-style legislative referendums or bills that arbitrarily limit state spending.”

Ms. Brewer’s other rationale is that everybody else is doing it, and that if Arizona opts out of a larger Medicaid then “Arizona’s tax dollars would simply be passed to another state.” Well, no, Washington would simply spend less money that it doesn’t have. In any event Arizona is already a net tax beneficiary—pulling down $1.19 from the feds for every dollar it sends to D.C., according to the Tax Foundation.

Governors Brewer and Kasich are not the only governors hopping on board this disastrous train to more heavy-handed federal government and higher costs for all:

Ten other GOP Governors have rejected Mr. Obama’s Medicaid bribe, with another 20, Democrats and Republicans, undecided. Twenty are expanding, including Republicans Brian Sandoval of Nevada, Susana Martinez of New Mexico, Jack Dalrymple of North Dakota and even, on Monday, Ohio’s John Kasich. Thus does modern government create the carrots and sticks of ever-larger government.

The Washington Examiner’s Philip Klein summarizes all of this political cowardice nicely – in short, Tea Party activists have our work cut out for us:

Whatever justifications Kasich may give, the actual explanation for his embrace of the Medicaid expansion is political cowardice. Chastened by his failed attempt at public sector union reform and Obama’s victory in the state, Kasich is up for reelection next year. And he’s afraid to stand up to the inevitable onslaught of attacks from Democrats who would charge that he was refusing to accept free money to bring health care to poor Ohioans. The end result is that a politician who ran for office claiming to have been “in the Tea Party before there was a Tea Party” is now actively embracing a policy that the Tea Party movement was born to oppose.

This should serve as a sober reminder to conservatives that no matter how big of a disaster Obamacare is when it’s implemented in 2014, the nation is almost certainly stuck with it. More broadly, it’s a demonstration of how difficult it is to defeat big government.